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What Are Low Float Stocks?

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In today’s article, we’re going to talk about low float stocks and why it’s so important to be able to spot them first because of the rapid price appreciation and why you have to be there as quick as possible and ideally be in first.

You’re going to hear a lot about low-float stocks especially if you’re starting to Google these terms and try and find out quote-unquote how to make money in stocks.

What is Low-Float

You’ll hear low-float a lot. And let’s kind of start out with defining some terms so that you know what these are. The float is the freely tradable shares of a stock. Every stock has a pre-set number of shares that are freely traded on the open market.

Now something like Apple might be five or six billion. Microsoft, I think, is like seven or eight billion. So think about the float as the supply, the amount of shares that day traders, swing traders, investors can freely trade and these shares aren’t locked up by institutions or insiders or employees in compensation plans, et cetera.

So why do we care about low floats? Why do we target them so much?

Because these are the type of stocks that can make the big moves that can really help you grow that small account. These stocks routinely go from a dollar to three dollars to nine dollars and even higher in the same day.

I mean, we’ve seen stuff in the past years like DRYS. This was a stock about a couple years ago, went from four dollars to 140 in like two days. KBIO was a couple years ago, went from the low single digits, I think four or five to like 55 dollars in a day.

You know, these are the type of big moves that can really make a difference in your account. So back to definitions, when we talk traditionally in day trading world about a low float stock, we’re talking about a stock that has less than ten million shares available of freely tradable shares.

Now why is AnjayToTrade so great?

Every screener, every tool, every filter, every watchlist, every chart, every data box in AnjayToTrade has the float listed as well as the ability to target low float stocks.

Some of these features are ones that I particularly requested because I love these low float stocks so much because they’re the volatile stocks. They’re the ones that make the big moves to the upside and keep in mind if you’re reading this article because you’re interested in short selling, the beauty of these stocks is they go up quickly and when the music stops, they can quite frequently come down very quickly so they’re great to go along on the front side and they’re great to short on the backside.

So definitely, if you’re looking to grow up a small account, you want to look at these. Have your plan in, you know, in play. You need to have a trade plan. You need to be disciplined on your stop loss and stop out when you hit your max loss.

But remember, with AnjayToTrade, the scanners, the filters, our algorithm oracle is specifically geared toward spotting these stocks. Start watching low float stocks, paper trade them to test first.

But for sure, look for stocks less than ten million float with news that are up big on the day.

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